CTL Strategies ranked in Chambers Global Guide 2024
CTL Strategies has been ranked in the Chambers Global Guide 2024, published by Chambers and Partners.
The new edition of the Global Guide highlighted CTL for its considerable market respect in tax matters, and demonstrating strength in litigation and corporate services. Among responses received from interviewees, Chamber and Partners quoted that the firm is “able to handle complex matters and provide unbiased legal advice.”
Chambers and Partners is an independent research firm that operates in 200 jurisdictions and is commonly referred to as the “gold standard” in the legal profession. Chambers and Partners publishes rankings and information on the world’s top lawyers and law firms. In-depth interviews with lawyers, in-house counsel for clients, and independent experts were used to compile the rankings.
Government Submits Bill to Tighten Thin Capitalisation Rules
The Government submitted a bill to the People’s Majlis on 18 October 2026 proposing the Third Amendment to the Income Tax Act 1. The Bill only amends Section 71, the thin capitalisation rule. If passed, the amendments will take effect from 1 January 2027 and apply in computing taxable income for the 2027 tax year onwards.
The bill makes two key changes to thin capitalisation rule. First, it reduces interest capacity from 30% to 25% of tax-EBITDA returning to the cap that applied when MIRA first introduced the rule by tax ruling in 2018. Second, it repeals the current mechanism that lets interest above interest capacity be carried forward and deducted in later periods for up to 10 years. As a result, interest disallowed under the thin capitalisation rule would be permanently forfeited rather than just deferred. The scope of the rule is unchanged, so interest paid to foreign banks and financial institutions remains within it; only interest paid to banks and certain financial institutions licensed in the Maldives is excluded.
The Ministry of Finance’s estimate accompanying the bill projects around MVR 496 million in additional income tax revenue in the first 12 months, based on 2025 tax return data.
The impact would be greatest on large, debt-financed developments, such as resorts financed with offshore borrowing. During construction and the pre-opening, these projects usually generate little or no tax-EBITDA and in their early operating years interest costs are typically high relative to earnings. Under the current rules, interest disallowed in those years can be deducted as the business matures, within the 10 year limit. Under the proposed rules, it would be permanently lost, leaving these businesses unable to deduct a significant part of their actual financing costs. This raises the effective tax burden on long-term investments at the stage when they are most financially vulnerable.
The bill also contains no transitional provision for interest already carried forward at 31 December 2026. Once the carry-forward provisions are repealed, these accumulated balances may become permanently non-deductible, which would also penalise businesses for interest they incurred under the existing rules.
Government Submits Bill to Abolish Offshore Inbound Tourism GST Regime
On 18 October 2026, the Government submitted a Bill to the People’s Majlis proposing significant changes to the Goods and Services Tax Act2, including the discontinuation of the GST regime applicable to offshore suppliers of inbound tourism products and related booking or agency services.
If enacted in its current form, the Bill would substantially reverse the inbound tourism product provisions introduced through the Eighth Amendment to the GST Act. This would include the removal of all the rules including the special registration, place of supply, tourism GST and margin-based valuation rules applicable to offshore suppliers.
Transitional Provision
The Bill specifically provides that the charging of TGST under the offshore inbound tourism regime from 1 October 2026 would cease upon commencement of the amendment. Where GST has already been charged under these provisions from 1 October 2026, the amount collected would be required to be refunded to the person from whom it was collected. The Bill also provides that no further obligations would be imposed under these provisions in respect of the period from 1 October 2026 up to the commencement of the proposed Ninth Amendment to the GST Act.
Other Significant Changes
Value of supply
Under the proposed changes, supplies between unrelated parties would be added to the categories of transactions for which the value of supply may be determined in accordance with rules prescribed under the GST Regulation. In practical terms, this would give MIRA a basis to examine and, where appropriate, determine or adjust the value attributed to transactions between unrelated parties, including the consideration charged for the relevant supply.
Expanded information-gathering powers
The Bill proposes to replace section 59-1, which currently enables MIRA to obtain information to identify offshore suppliers of inbound tourism products, with a general power for the Commissioner General to obtain information from GST-registered persons about the persons with whom they transact, for the purpose of identifying persons required to register for GST.
New general GST anti-avoidance rule
A new general anti-avoidance provision for GST is also proposed. Broadly, where a transaction gives rise to a tax benefit and obtaining that tax benefit is a main purpose or one of the main purposes of the transaction, the Commissioner General would be empowered to disregard or reconstruct the transaction and determine the GST payable as though the tax benefit had not arisen. The proposed definition of a tax benefit is broad and includes, among other matters, reductions or deferrals of GST, increased input tax deductions or refunds, and treating taxable supplies as not being subject to GST.
The Bill also provides that consequential amendments and new regulations to give effect to the proposed changes to be made and published in the Government Gazette within 90 days of the commencement of the amendment.
Effective Date
The proposed Ninth Amendment will only take effect once it is passed by the People’s Majlis, ratified by the President and published in the Government Gazette. Until then, the existing provisions of the GST Act, including the offshore inbound tourism regime, remain in force.